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UK drinks exports grew 13% last year to £9.4bn as international demand for UK spirits boosted global sales.
Drinks exports grew from £8.3bn to £9.4bn in 2022/23, according to Hazlewoods, Chartered Accountants and Business Advisers.
Hazlewoods said that sales were boosted by demand for UK heritage brands in whisky and gin, as international consumers drive the trend for choosing higher quality products.
It said there is continued demand for scotch from traditional markets in EU countries, including France, Germany, Spain and Poland, which are among the top ten export markets by volume.
Despite Brexit, exports to the EU reached close to £1.6bn in the last year, making it the second largest regional market for Scotch whisky. However, sales of more perishable, lower margin drinks to the EU, such as beer have suffered due to Brexit related red-tape.
Drinks exports to countries outside the EU also continue to boom. The US remains the biggest export market of Scotch whisky by value, as exports in 2022 reached just over £1 billion.
Additionally, exports to nations like India and Singapore have increased sharply in the last year. In 2022, India became the Scotch Whisky industry’s largest global market by volume, which comes as wealthier Indian consumers are attracted to Scotch Whisky’s premium image.
Whisky is the UK’s single biggest food and drink export by value. The industry is aiming to add another £1bn of exports over the next five years, which will depend heavily on a UK-India free trade agreement that addresses key impediment like the 150% tariff on imports of Scotch Whisky into India, making it markedly more expensive than Indian whiskies.
Despite consumers drinking fewer overall units of alcohol, the premiumisation of the drinks industry, with an emphasis on gin and whisky, had added important jobs and investment for the UK economy, Hazlewoods said.
Rebecca Copping, Associate Partner at Hazlewoods, commented: “British heritage brands have successfully placed themselves as a luxury in the international drinks market. A large chunk of this success is due to young, wealthy consumers purchasing quality drinks brands that signify status and success.”
“Despite volatility in the economy and high interest rates around much of the globe, consumer spend on luxury goods has held up well, although sales growth of luxury goods is slowing. This post-COVID boom in luxury goods sales certainly had a hand in increasing UK drinks exports.”
“Now the industry is focused on long term growth, reaching bigger, untapped markets. The UK Government can support that by delivering trade agreements that lower barriers to expansion.”
“While whisky is playing a huge role in the export increase, this is also a success story for UK drinks brands that focus on gin and other spirits. It’s the heritage image and luxury branding that draws in a lot of consumers, especially those in growing markets like India and Singapore.”
Morning update
Global demand for Waitrose own-brand products has grown by 92% in the last decade as we have continued to expand into new territories, according to the supermarket.
Waitrose said it is rapidly scaling up its export business, shipping to more countries and offering a greater range of products.
Sales are up 14% on last year and the supermarket has set a growth target of at least 10% for next year.
Current exports through retailers and distributors range from Waitrose baked beans to Barbados, chocolate digestive biscuits to Singapore, peanut butter to Chile, wholewheat biscuits to Mauritius, Waitrose Cheddar to Hong Kong and mince pies to the Middle East.
Additionally, the group has 15 shops throughout Dubai and Abu Dhabi in Partnership with Spinneys. The Dubai Mall shop also now includes a selection of John Lewis products from gifts to home accessories, as well as kitchen and dining products.
Waitrose first began exporting products more than 25 years ago, shipping to Hong Kong. Today, the Waitrose brand can be found in 42 territories, including Malaysia, Chile, Jordan, Singapore, Vietnam, Thailand and nine Caribbean islands.
More than 2,000 of our Waitrose own label products are now available around the world, including chilled, frozen, store cupboard staples and health and beauty lines, Essential Waitrose, Waitrose No.1, Waitrose Duchy Organic and Free From and plant ranges.
It said its top selling products so far in 2023 are Essential Waitrose Chopped Tomatoes, with international customers consuming 200,000 cans, and Essential Waitrose Toilet Paper having sold more than 120,000 rolls.
James Bailey, Executive Director for Waitrose, said: “Waitrose has truly been overheard around the world and shoppers from Antigua to Vietnam want to get their hands on our products, which are renowned for taste, quality and provenance.
“We’re now expanding our international business to cater for the growing global demand from local residents and British expats who miss the taste of Waitrose from home.”
On the markets this morning the FTSE 100 has opened the week down 0.3% to 7,532.2pts.
Risers so far today include Naked Wines, up 10% to 41.8p, McBride, up 9.5% to 78.8p and Nichols, up 8.2% to 1,082p.
Fallers include Virgin Wines, down 3.9% tp 37p, Bakkavor, down 1.9% to 82.2p and Coca-Cola Europacific Partners, down 1.7% to €58.50.
This week in the City
A quiet week as we head towards Christmas is highlighted by annual results from Poundland owner Pepco tomorrow morning.
Also tomorrow will bring the latest monthly Nielsen grocery market share figures.
The Bank of England’s Monetary Policy Committee will make its latest decision on interest rates on Thursday, while the monthly GFK Consumer Confidence index is out on Friday.
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